Canada’s tight housing market keeps getting tighter.
It started long ago in Vancouver and Toronto, as a strong economy, population growth and ultralow interest rates met too little housing stock. Prices surged.
But over the past two years, that long-standing problem has grown and spread. It’s gone national. The price of a typical home in Canada was $574,200 in early 2020, according to the Canadian Real Estate Association. Today, it’s $811,700 – up 41 per cent since the start of the pandemic, and 122 per cent over a decade.
Canadian governments have spent years watching but rarely acting. To tamp down on demand there have been tougher mortgage rules and a few taxes here and there – levies on foreign buyers have been especially popular – but not much was done to boost the supply of housing.
But action, better late than never, is coming. Or at least plans for action. The challenge will be to choose the best ideas, and make sure they are put into practice.
Let’s start in Ontario. In early December, Premier Doug Ford’s government struck a task force, with a mandate to quickly deliver a plan to get more housing built in Canada’s largest province. The report was submitted on Monday and is expected to be made public soon. An early draft from the task force suggests that one of its leading proposals will involve forcing cities to allow more “missing middle” housing – such as fourplexes or small apartment buildings of four storeys – in neighbourhoods currently reserved for detached homes. This sort of density is essential.
The draft report also contained some questionable ideas – such as endorsing further urban sprawl – but much of what it floated would be an improvement on the status quo.
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There’s a provincial election in the spring, and any proposals for new density in established old neighbourhoods will face opposition. But density is what’s needed. If Ontario goes down this path, it would be following a new trend in housing, where higher levels of government step in to force city councils to loosen up restrictive zoning. New Zealand and California are recent examples.
British Columbia is mulling similar ideas. The provincial Housing Minister last month said a “massive housing boom” was necessary. Frustrations include zoning along the Broadway Subway in Vancouver, a $2.8-billion project mostly funded by the province and Ottawa. The new line should be a spur to neighbourhood densification, yet city council is still studying the matter.
Vancouver in 2018 launched the process for creating a new citywide plan. It could add more density, pending a council vote later this year, ahead of a fall election. Vancouver has favoured small moves, after years of debate, including a modest expansion of rental housing and, last week, a plan to allow just 2,000 detached homes or duplexes – out of a total of 99,000 in the city – to be converted into six homes.
This is an equation of timidity.
Housing prices are driven by supply and demand, not magic. When a city allows little or no new housing in many areas, it stokes a land rush where density is permitted, making housing more expensive. Research suggests that a broader rezoning would ease such pressures. Ontario appears to be thinking along those lines.
The City of Toronto is also mulling – slowly, of course – something big. In 2019, it started talking about adding density by allowing more missing-middle housing – the category between high-rises and houses. Last November, planners laid out ideas for things such as four-storey apartments in neighbourhoods that currently allow only low-rise homes. Council will see final proposals by June.
Then there’s the federal government. In last fall’s election, the Liberals promised $4-billion for cities that “tackle NIMBYism” in housing – meaning restrictive zoning. Ottawa is also planning a “national housing summit” with mayors. Ontario did the same a few weeks ago.
After years of inaction, there’s a sudden rush of ideas, and signs of real competition among politicians and levels of government. What’s more, there seems to be a widespread realization that allowing more housing to be built, in the existing neighbourhoods where more people want to live, has to be a big part of the solution.
Canada is finally rethinking how we zone cities, and how we decide what is allowed to get built, and where. It’s an opportunity that must not be wasted.
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